https://www.taxtmi.com/circulars?id=65784 GST treatment of payments such as liquidated damages, penalties, compensation or cancellation and late payment charges depends on whether the payment constitutes consideration for an agreement to refrain from an act, to tolerate an act or situation, or to do an act under para 5(e) of Schedule II. Payments that are merely compensatory flows for breach, statutory compensation or fines for violations are not consideration for a supply and are not taxable; payments that represent consideration for ancillary or independent contractual facilities (eg. cancellation fees, late payment acceptance, prepayment or early termination charges) are taxable and assessed as the principal supply where applicable. en-us Wed, 03 Aug 2022 00:00:00 +0530 Thu, 04 Aug 2022 11:58:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/circulars?id=65784 GST treatment of payments such as liquidated damages, penalties, compensation or cancellation and late payment charges depends on whether the payment constitutes consideration for an agreement to refrain from an act, to tolerate an act or situation, or to do an act under para 5(e) of Schedule II. Payments that are merely compensatory flows for breach, statutory compensation or fines for violations are not consideration for a supply and are not taxable; payments that represent consideration for ancillary or independent contractual facilities (eg. cancellation fees, late payment acceptance, prepayment or early termination charges) are taxable and assessed as the principal supply where applicable. Circulars GST Wed, 03 Aug 2022 00:00:00 +0530 https://www.taxtmi.com/circulars?id=65784